The world is on the cusp of the “copper age”, with the price of this essential metal skyrocketing by 18% this year to reach close to two-year highs of around $9,910 per tonne on the London Metal Exchange, reports Étienne Goetz in Les Echos. The surge in price comes as demand for copper continues to grow rapidly, with a potential shortfall in production looming on the horizon.
According to CRU Group, a massive $150bn investment in new copper supply will be needed between 2025 and 2032 to meet the rising global demand. However, factors such as higher interest rates and environmental opposition to mining projects are dampening investor enthusiasm to finance new operations.
Exploration budgets for copper have seen a decline since the early 2010s, making the journey from discovery to production a long and arduous process taking over ten years. This extended timeline increases the risk of projects being derailed by political or market conditions, potentially driving prices up by as much as 20% to attract interest in new mines.
Despite the growing interest in copper, as demonstrated by miner BHP’s recent bid for Anglo American, there is a growing concern that existing operations are being shifted between owners rather than new mines being opened. With copper being a crucial component in various industries, from electrical switches to solar panels and electric vehicles, the world is facing a looming copper shortage that could lead to a significant deficit by 2030.
Analysts predict that the price of copper could soar as high as $15,000 per tonne as demand continues to outstrip supply. With China consuming half of the world’s copper supply and the rapid growth of electric vehicle and solar panel production, the future of copper looks promising but uncertain. As the world transitions to cleaner energy sources, the demand for copper is expected to remain high, paving the way for a potential commodity price supercycle.
